In an interesting turn of events, a securities class action settlement with Navient Corporation foreshadowed a monumental consumer settlement that impacts some of the most in debt borrowers. Many who dealt with Navient were allegedly misled into loan repayment plans that ultimately accumulated large fees or extended the life of their loans to collect as much interest as possible. Attorney Generals from several states wrote in their complaint:

“Despite promising to help borrowers find the best repayment option to minimize interest costs, Navient deceptively steered distressed federal loan borrowers into costly long-term forbearances instead of informing them about the benefits of income-driven repayment plans. Interest that accrued during these forbearances was added to borrowers’ loan balances, pushing borrowers deeper into debt.”

The impressive $1.85B settlement will help over 400,000 people who were impacted by Navient’s suspect business practices. Navient will pay $260 to roughly 350,000 borrowers and people who qualify do NOT need to file a claim. Although the settlement feels like a class action, this is the result of the work done by State Attorney Generals. Harmed borrowers only need to make sure their addresses are up to date on studentaid.gov or make an account if you do not have one. Now, the biggest part of the settlement will actually cancel the remaining balances on private loans taken out by over 60,000 students who for the most part attended for-profit schools like Devry University and ITT Technical Institute to name a few. In total, $1.7B in debt will be wiped clean for people who have been paying for many years.

If you believe you qualify for this settlement please reach out and we are happy to guide you in the right direction.

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